With the review of the Bitcoin spot ETF application entering a critical moment, the U.S. Securities and Exchange Commission (SEC) has requested 13 issuers to confirm the detailed information of the Authorized Participants (AP) in the updated S-1 documents. In addition, they must submit the documents by December 31st.
Recently, several issuers have submitted revised S-1 documents, including Hashdex and Pando Asset. BlackRock plans to launch a $10 million seed fund on January 3rd.
Currently, there are 13 issuers that have submitted applications for a Bitcoin spot ETF to the SEC, including Grayscale, BlackRock, Fidelity, VanEck, ARK, 21Shares, and Bitwise, among others. They have been in continuous discussions and modifications with the SEC regarding the S-1 application documents.
According to Bloomberg ETF analyst Eric Balchunas, the updated S-1 document requested by the SEC includes an important change: the addition of the “AP Agreement” in the latest snapshot of the “ETF Cointucky Derby.” This change is due to the SEC’s desire to confirm the detailed information of the Authorized Participants (AP) in the upcoming S-1 document updates (within the next 10 days).
Balchunas pointed out that this requirement may be difficult for some issuers to meet and they may not be approved simultaneously. However, the combination of “confirming the AP agreement” and “cash creation” is likely to be the key to obtaining formal approval.
On the other hand, according to Fox Business reporter Eleanor Terrett, it has been revealed by insiders that the SEC has requested issuers to submit the revised documents by the end of next week (December 31st), including the latest content from yesterday’s conference call. This indicates that issuers need to quickly determine the identity of the AP to meet the SEC’s requirements.
According to disclosures made by Bloomberg analyst James Seyffart, several issuers have already submitted revised S-1 documents, including BlackRock, Hashdex, and Pando Asset. These three companies have proposed revisions for the Bitcoin spot ETF, with Hashdex selecting BitGo as its custodian partner.
Seyffart found Pando Asset’s revised document somewhat confusing because it mentioned the possibility of using cash to create the ETF while also retaining the possibility of using physical assets.
It is worth noting that BlackRock has not yet determined its Authorized Participants (AP) in the recently submitted S-1 document. On the 18th, BlackRock submitted a revised version of the S-1 document to the SEC, explicitly stating that it will adopt the SEC’s preferred “cash purchase/redemption” model. This means that the AP will not directly handle Bitcoin but will use cash to create and redeem shares.
As early as December 4th, BlackRock had raised $100,000 in seed funding for its planned Bitcoin spot ETF. At that time, Bloomberg ETF analyst Eric Balchunas commented that although the amount was not large, it was enough to show that the project was moving forward.
In the latest submitted S-1 document, Seyffart pointed out that BlackRock plans to take further action on January 3rd and inject $10 million in seed funding into its ETF. This is a significant increase compared to the previously announced $100,000. Seyffart emphasized that the investment of this seed fund does not mean that the ETF will immediately launch, but it aligns with their prediction that the Bitcoin spot ETF will be approved in January. Interestingly, he also pointed out that BlackRock chose January 3rd as the date, seemingly to commemorate the anniversary of the birth of the Bitcoin genesis block.
In addition, SEC Chairman Gary Gensler mentioned in a speech on the 14th that they will re-examine the application for the Bitcoin spot ETF based on the result of the court ruling between Grayscale and the SEC. With the issuers needing to submit the revised documents by December 31st, these recent developments have increased market expectations for the approval of the Bitcoin spot ETF before January 10th.